All-In Pricing Starts To Become The New Normal

The FTC’s rule banning unfair and deceptive fees went into effect this month for live-event and short-term rental companies, which has forced companies to show all-in pricing on their sites.

Why It Hits: Hidden fees, junk fees — whatever you want to call them — have been taking advantage of consumers for years, pressuring them to make quick decisions based on misleading prices. What looks like a fair deal at first often turns out to be much more expensive at checkout. Giving people the full, upfront cost from the start could disrupt how ecommerce works across industries.

Behind the Prices: The Biden administration, which kicked off the FTC’s rule, estimated in 2023 that Americans were losing $1 billion per year due to hidden fees.

• The bipartisan rule “prohibits bait-and-switch pricing and other tactics used to obscure and misrepresent total prices and fees.”
• Since its implementation on May 12th, companies like Ticketmaster, StubHub, and Booking.com now show the full price of a ticket or reservation upfront.
• The goal is to supercharge “comparison shopping,” allowing consumers to more accurately search for the best deals before making a purchasing decision.
• But since it only applies to live-event and short-term rental platforms, you’ll still see those fees tacked onto the end of a DoorDash delivery or a Hertz rental-car reservation.

Checkout: There’s a sneaky psychology at play when it comes to hidden fees. People instinctively react to the first price they see, and when confronted with the higher total at checkout, they have already subconsciously committed to the purchase and feel a “sunk cost” if they abandon it, per Insider.

In fact, between 2014 and 2015, StubHub tested an all-in pricing strategy, hoping that consumers would reward them for their transparency. The opposite was the case — there was a 28% decline in revenue. StubHub quickly reversed course after that.

Prediction: As all-in pricing creates the perception that tickets and rentals are more expensive, smaller bands or rentals off the beaten path could see a surge in popularity as people try to make more budget-conscious decisions.